Meet our customer hero
Banking disintermediation as an opportunity
Bank Sinarmas was established in 1989 with a strong vision: to be the leading bank in Indonesia driven by an integrated distribution network. This vision remains the same today. Even if the banking environment is totally different: In Indonesia, like the rest of the world, banks occupy the role of intermediaries less and less. Instead, consumers and businesses transact or invest directly. Termed disintermediation, Bank Sinarmas knew this need not be an existential threat to the bank. Traditional banks like theirs could still grow, but it would require opening their services up to these third-parties directly.
Many of these potential partners were/are fintechs (previously the competition)—boasting a modern technology stack, storing data in the cloud, and using the latest, secure messaging protocols to transfer it. “We needed to match fire with fire to ensure a piece of the pie” says Irwan Wijaya, Middleware Division Head. “This was going to require us to modernize our IT platform to connect with the partner ecosystem.”
“At that time” Irwan explains, “we were using numerous proprietary messaging protocols like ISO8535, GSI, OFS, BASE1, and BASE2 for our core banking systems. We had legacy Java-based middleware architecture, and numerous disparate TCP/IP sockets. We needed an integration layer to build, group, manage, control, publish and secure APIs to speed up innovation. And deliver new, differentiating products and services to improve customer engagement. The ultimate goal being to monetize these APIs as new revenue for the bank.”
Compared to the competition, the webMethods platform with API gateway was as secure as it was open. This meant Bank Sinarmas was able to connect legacy implementations using JSON REST (internally) and partners could integrate easily with the bank (externally.) “The decision to go with Software AG was crucial” says Irwan, “We were looking for a partner that shared our vision. As late adopters we were wanted speed, simplicity, and scalability. It ticked all the boxes”.
Available on premise or in the cloud, the bank’s new integration platform came with a modern architecture that was easy to integrate either horizontally or vertically. webMethods Microservices Runtime (MSR) technology was chosen because the bank anticipated high volume transaction demand. With support from MII–Mitra Integrasi Informatika—a Software AG partner—it was up and running fast. “We onboarded microservices quickly” says Irwan, “From a developer’s point of view, webMethods uses normal coding but deployment is already on the container and we could use Docker, and Kubernetes all within our webMethods environment.” The use cases started rolling in:
ISO 20022 with BI-FAST: In December 21, for example, the Central Bank of Indonesia launched Bi-Fast for individual credit transfer services. As part of Indonesia’s payment system blueprint, its aim is to support industry consolidation, and end-to-end integration across the digital economy. This would have previously been a huge architectural headache for the bank to adopt. But Bank Sinarmas implemented BI-Fast using webMethods MSR—relying on its own in-house development without any support. “The library of connectors and adaptors enabled us to tap into a rich ecosystem really quickly,” says Irwan. “Not bad for the first microservice implementation that Bank Sinarmas had ever performed” Irwan adds. “This not only got us acknowledged as an early mover by the Central Bank, but we have already seen a tremendous boost in mobile banking sales.”
API banking authentication: Another use case involves one of the biggest brands in the telco industry and shows the potential for microservices to revolutionize the customer experience. “One of our clients has so many suppliers, and sales orders all on SAP. Soon, once they authorize them their end, payment collections will be automated via API banking transactions.” says Irwan. The project is expected to last just 5 months and has already been signed off by the regulators.
The next logical step is to start innovating around APIs as revenue drivers. At the moment, the bank’s APIs are used a lot on the client side to report on balance inquiries. And the plan is to develop new data-driven services around such requirements. “This will see us opening ourselves up to new business models” says Irwan, “which we’d be looking to develop beyond the existing group ecosystem.” Naturally, the team acknowledge, this will require the bank to comply with Indonesia’s new Open API-Banking Standards (SNAP.) But no one envisages a problem. “Security is the backbone of the bank” Irwan explains “but our new middleware is already telco-mandated, complies with the latest standards, and has been tested rigorously". When the time is right, the official implementation of SNAP is expected to be just that.